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Non-Farm Payrolls Increase; Unemployment Rate at 7.7 Percent

Monday, March 11, 2013 9:15 AM

The Labor Department reported non-farm payrolls rose by 236,000 in February edging down the nation’s unemployment rate to 7.7 percent, or about 12.0-million persons. Private sector payrolls increased 246,000.

The number long-term unemployed, those seeking full-time work for more than 27-weeks, was unchanged at 4.8-million, about 40 percent of unemployed workers. The number of people working part-time for economic reasons stood at 8- million, approximately 5.6 percent of the workforce.

The underemployment rate, which aggregates those unemployed with individuals working part-time but desiring full-time employment and those who have given up on their current search for lack of jobs, stood at 14.3-million, about 10 percent of the workforce, also unchanged from last month.

Another 296,000 individuals were dropped from the labor force statistics in February. This brings a total of 1.7-million people removed from the rolls over the past twelve months. If half of these were legitimately returned to the data, the nation’s unemployment rate would stand at 8.2 percent.

Since 2009, the number of people removed from the labor force data totals 7.6-million. By contrast, the data also shows the number of employed has increased 3.6-million but the size of the labor force has only increased 1.4-million. This explains the 2.2-million reduction in unemployment but doesn’t seem to reconcile with the drop in the reported unemployment rate from 9.3 percent to 7.7 percent.

Regardless, the report is welcome news to the market and should be as well to credit union managers. Employment is the principle driver to economic growth and loan demand. Although the first quarter of each year is not traditionally and strong lending period, the results could reflect general improvement in demand for the second and third quarter.